8.7% Covered California 2019 Rate Increase

     Covered California has announced a projected 8.7% rate increase on 2019 health plans despite recent court rulings in New Mexico and Massachusetts. The rulings suspended $10 billion in “risk adjustment” payments meant to
stabilize the insurance market.
     The program transfers money from insurers with healthier enrollees to those with enrollees who are more at risk in order to avoid “cherry-picking” by companies who take only the healthiest people.
     Despite Congress’s failed attempt last year to repeal and replace the ACA, the Trump administration has been able to weaken the health law by halting subsidies covering some out-of-pocket costs and eliminating the mandate to have insurance.
     Critics said that the suspension of payments will drive up costs and further undermine the ACA. Dave Jones, California Insurance Commissioner, maintained that the “Trump administration has just taken another step to sabotage the nation’s health insurance market.”

How The Federal Tax Law Affects Healthcare Coverage in 2018

     It will be ‘business as usual’ for healthcare with the main components of the Federal tax law going into effect in January 2019. What is still in play for 2018? Subsidy assistance for those who qualify, the penalty for not having insurance, and guarantee issue for those with preexisting conditions. In California, the Open Enrollment Period to get a health insurance plan is extended to January 31, 2018.
     How the lifting of the federal mandate will affect healthcare markets is unclear. The GOP, however, is elated at the removal of  the cornerstone of the Affordable Care Act.
     “Obamacare’s coercive individual mandate represents perhaps the worst example of the federal government violating individual freedom and liberty,” Rep. Mark Walker (R-N.C.), chairman of the conservative Republican Study Committee.
     The American Academy of Actuaries, in a warning to congressional leaders, stated that if the mandate is eliminated, “premiums would increase as a result, reducing affordability and eroding preexisting condition protections.”
     In California, it is estimated that 1.7 million fewer individuals will be without health insurance over the next decade with the repeal of the mandate.  Experts predict many young, healthy people will drop coverage if it is not required.

Californians Fear Losing Health Coverage

A poll by the Institute of Governmental Studies at the University of California-Berkeley shows more than half of Californians fear they or a family member will lose health coverage if the Affordable Care Act is repealed.

For those with household incomes of less than $20,000 per year and people enrolled in Medi-Cal, the concern is even greater.  Medi-Cal covers 13.5 million Californians, and nearly 4 million of those enrolled were covered as a result of  Medi-Cal’s expansion under Obamacare.

“We all have friends or relatives who are or have been on this program,” said Jennifer Kent, director of the State Department of Health Care Services, which administers Medi-Cal. “The state has literally bent over backwards to make the ACA work.  This poll is basically now showing that people are appreciating what has been built and are worried that it’s going to be taken back down again.”

The GOP bill passed by the House in early May would eliminate the major tenets of Obamacare and cap federal funding of Medicaid. The Congressional Budget Office estimated that the bill would  cause nearly 23 million more people to lose health coverage by 2026 and federal spending on Medicaid would be cut by $834 billion over 10 years.

U.S. Senate leaders are drafting their own version of a health bill with a vote expected before July 4.

 

Key Aspects of American Health Care Act Proposed

The changes to the ACA addressed in the American Health Care Act will not be final until passed by Congress but already criticism of some of the key aspects are being voiced by some Republican Senators. All are from states that expanded Medicaid under the ACA and indicated they would not support a plan that would leave millions of Americans uninsured. In a letter to Senate Majority Leader Mitch McConnell, Senators Rob Portman of Ohio, Shelley Moore Capito of West Virginia,  Cory Gardner of Colorado and Lisa Murkowski of Alaska stated “We will not support a plan that does not include stability for Medicaid expansion populations or flexibility for states.”

Medicaid expansion implemented in the ACA would end in 2020 under the new Act. People already enrolled would continue to get coverage, but new enrollees would be prohibited, and those who leave coverage could not return to expanded coverage.

Other key changes include:

  • Suspension of the mandate requiring individuals to sign up for health insurance – However, there would be a 30% surcharge if you let your coverage lapse and want to get coverage at a later date.
  • Elimination of the premium subsidies for those with low to middle incomes – These would be replaced with tax credits for individuals who have annual incomes below $75,000 or married couples with annual incomes below $150,000.
  • Pre-existing conditions will continue to be covered and charged at the same rate as those without pre-existing conditions.  The ban on lifetime and annual limits would remain in place.
  • Some large employers would not have to offer health coverage to employees – However, the 40% Cadillac Tax would remain in effect on plans that cost more that $10,200 for individuals and $27,500 for families.
  • Under the new plan insurers could charge older people five times what they charge younger ones.  Under the ACA, it was capped at three times the rate.
  • Children up to age 26 can remain on their parents’ plans under the American Health Care Act – Same as the ACA

 

 

 

 

 

 

‘Universal Access’ Goal of GOP

   healthcare-header
     The GOP’s replacement for Obamacare will likely eliminate the mandate that everyone must get health insurance or be fined. With 20 million people now covered with ACA plans through federal exchanges, the number of uninsured is at record lows. Although Republicans are certain to repeal the law, they are assuring that there will be a transition period, and no one will lose coverage on January 20, 2017 when President-elect Trump is inaugurated.
     “There’s a lot of scare tactics out there on this,” said Texas Representative Kevin Brady, chairman of the Ways and Means Committee.  “We can reassure the American public that the plan they are in right now, the Obamacare plans, will not end on January 20.”
A House aide confirmed that repealing provisions of the law
is a priority, but added there would be a transition period of anywhere from 2 to 4 years to allow time to make replacement coverage available.
     “Our goal here is to make sure that everybody can buy coverage or find coverage if they choose to,” the aide said at a Republican-organized briefing.
     The future of the cost-sharing subsidies that reduce out-of-pocket costs of low-income people has yet to be decided, according to the aide.  In May, a federal district judge ruled the Obama Administration paid out billions to insurers even though Congress had not appropriated money for the payments. That money is key to the success of the the federal exchanges.
     Despite the uncertainty, people continue to sign up for the plans in record numbers. So far, nearly 670,000 have chosen health insurance plans on federal exchanges. Open enrollment ends on January 30, 2017.

Stricter Rules for Special Enrollment Periods

    Qualifying Event Necessary for Sign-Up
     With many insurance companies losing money on Federal Exchange plans, the Obama Administration is tightening rules on allowing people to sign up outside of the Open Enrollment Periods.
Insurers claim the rules are too broad with people getting coverage because of an illness rather than a legitimate Qualifying Life Event. That leads to higher healthcare costs because an influx of “sicker” people increases cost of coverage.        Now there are 33 categories that allow people to sign up during Special Enrollment Periods throughout the year. The Qualifying Life Events include circumstances like getting married, divorced, losing a job, moving, having a child, or gaining citizenship. Federal officials said nearly 950,000 people enrolled outside of Open Enrollment between February and June of 2015.
For a complete list of qualifying life events, go to Life Events.

Medicare Premium Set for 2016

For most people, the premium for Part B Medicare will be $121.80 in 2016. Part B recipients paying for Part B through Social Security in 2015  will still be paying $104.90 in the new year.  Those new to Medicare and those delaying Social Security will pay the higher amount.

Cost Sharing Amounts for 2016 are as follows:

Part A Deductible $1,288 deductible for each benefit period
Hospital Days 1-60: $0 coinsurance for each benefit period
Days 61-90: $322 coinsurance per day of each benefit period
Days 91 and beyond: $644 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
Part B Deductible $166.00 annual deductible
20% of Part B charges